Bitcoin - Japanese Metaplanet adopts Michael Saylor's strategy

Metaplanet has decided to duplicate the Bitcoin strategy implemented by Microstrategy, Michael Saylor’s firm.

Big in Japan

Metaplanet, a company listed on the Tokyo stock exchange, has just released the reasons why bitcoin will now be an ” strategic asset for treasury reserve “.

This is a direct response to the ” high level of Japanese public debt, the prolonged period of negative real interest rates, and the resulting weakness of the yen “.

Indeed, Japanese public debt represents 261 % of the GDP, and the yen is at a 34-year low against the greenback. It has lost 50% of its value since 2012.

” The overwhelming national debt requires structurally low-interest rates that significantly weaken the yen “, one can read in the press release.

” The precarious situation of the yen was revealed to the world at the end of April. The yen fell to its lowest level in 34 years against the dollar. It took an unprecedented intervention from the BoJ in the foreign exchange market( ~$35 billion ) to correct it. “

Metaplanet considers that bitcoin is fundamentally superior to any other currency, cryptocurrency, store of value or traditional investment :

” Bitcoin’s monetary policy is set in stone until 2140. It distinguishes itself from both gold and other cryptocurrencies whose monetary supply depends on the whims of centralized teams of developers. There will never be more than 21,000,000 bitcoins. “

Strategic Reasons for the Adoption of Bitcoin

Metaplanet is orienting its treasury strategy towards bitcoin primarily to mitigate the currency risks associated with Japan’s gargantuan debt.

Two of the main benefits presented are:

1) ” Protection against currency depreciation. While the yen continues to weaken, bitcoin offers a stateless store of value that could continue to appreciate relative to traditional currencies. “

2) ” Speculative arbitrage on the financial markets. Taking advantage of the extreme opportunity presenting itself in the Japanese financial markets, Metaplanet intends to acquire bitcoin by issuing long-term yen bonds (at very low rates) or through the issuance of shares. “

It is indeed the same strategy employed by Microstrategy which holds 214,400 BTC in treasury. Here is a good conversation about this strategy for English speakers:

“He’s speculative attacking the U.S. stock market & passive income flows… he’s about to make it into the S&P 500 where he can perform the vampire attack of all vampire attacks.”- @americanhodl8 discussing Saylor’s $MSTR #Bitcoin strategy@titcoinpodcastpic.twitter.com/eXdRxN4SnT

— Walker⚡️ (@WalkerAmerica) March 15, 2024

The firm of Michael Saylor has already borrowed close to $600 million at the rate of 0.88 %. All through convertible loans due only in 2031. It also issues more shares when the company (and the market as a whole) is overvalued. The goal being always to buy more bitcoins.

It’s a dilution in the sense that shareholders hold fewer shares of the company, but they ultimately own more bitcoin per share.

Michael Saylor believes that all overvalued companies should issue shares and place the proceeds from the issuance in bitcoins. His strategy is ultimately very simple: obtain as much fiat money as possible and buy bitcoins with it.

Diluting one’s shares is comparable to mortgaging one’s house. It’s not a bad idea if the asset you invest in appreciates faster than your house.

So when will LVMH turn?… Let’s conclude by highlighting that Michael Saylor assures there will be no Ethereum ETF.